July SAAR highest since last September as CARS pumps sales

No matter how you feel about the government’s rebate program, it’s hard to deny it has been one of the best expenditures of federal funds so far in the Obama administration. In terms of putting money directly into the economy, it has performed as advertised.

The proof is in the pudding, as they say, and the pudding was tasty in July. The seasonally-adjusted annualized sales rate for July was 11.24 million units, the highest since September 2008 and the first time the SAAR has hit 10 million since December. According to figures released by AutoData, automakers missed a million sales by less than 2,500 units as the Cash Allowance Rebate System (CARS), also known as “Cash for Clunkers,” drove consumers to showrooms in numbers not seen in a long time.

Outside of the premium brands, where few models qualified due to the $45,000 base price limit, nearly every carmaker commented favorably on the government program.

The big concern for automakers, dealers and consumers is whether or not the program will continue. The original $1 billion fund was nearly entirely committed by the end of the first week of a program that was supposed to run until the end of October. The House has authorized another $2 billion, but approval by the Senate is not certain and there’s less than a week left before its members head off for another long break. Discussion of the measure is due to begin tomorrow.

In contrast to the long dry spell that has characterized light vehicle sales so far this year, July was like a welcome shower. Several manufacturers, including Ford, Hyundai, Kia and Volkswagen sold more cars and trucks last month than they did in July 2008. Subaru finished the month with a new all-time sales record.

Chrysler sales jumped 30 percent over June and enjoyed their lowest month-over-month deficits this year, just 9.4 percent behind July 2008. The Belvidere triplets, the Dodge Caliber, Jeep Compass and Jeep Patriot posted solid gains, the Journey outsold the Ford Flex and the Caravan outsold all the other minivans. The Wrangler took a big hit in July, dropping out of the Top Twenty, but still remains the top-selling traditional SUV. Chrysler also whittled down its inventory. Chrysler’s total light truck sales were just 8.1 percent shy of the numbers posted last July.

Ford posted its first-month-over-month increase in more than a year and a half, and the F-Series remains the best-selling vehicle in the land, but the volume wasn’t enough to keep the Dearborn gang from falling back into third place, behind GM and Toyota.

GM took the biggest hit of the Detroit automakers, missing its mark by 19.4 percent, but the folks in the Renaissance Center seem to have spent July focused on shuffling executives instead of moving iron. The Silverado is still trailing the Toyota Camry and the best-selling American car is wearing a blue oval instead of a bow tie.

Toyota, Honda and Nissan all came up short. Nissan slumped 24.6 percent, followed by Honda, down 17.3 percent. Toyota’s 11.4 percent shortfall was it’s best showing in months and vaulted it back into second place in the American market.

Subaru came up roses with its best sales month ever. It was joined in the plus column by Hyundai and Kia and whoever said Americans wouldn’t buy diesels apparently didn’t get through to the folks at Volkswagen; they’re happily selling diesel-equipped Jettas and Jetta Sportwagens in quantities large enough to boost VW into the black for the month and cement it’s position as the best-selling European brand.

Some of the VW magic is rubbing off on Audi which, although its volumes are far lower than its upscale German competition, has the best year-over-year performance of the bunch. BMW dropped behind Lexus for the month but still maintains a slim lead in year-to-date (YTD) sales. Strong sales of the new E-Class weren’t enough to keep Mercedes out of the red and the current economy isn’t the right environment for the Smart which has seen a serious drop in sales.

While we now know that big government rebates work, we don’t know if the sales satisfied pent-up demand for vehicle purchases that had been postponed or pulled forward sales that might have gone to August or September. Despite the gains in the stock market, we haven’t seen the gains in the job market that would indicate more money in consumer hands for vehicle purchases. If the Senate decides not to approve the additional funds for the CARS program or just decides to let the situation simmer until after the break, August could be very grim for the auto industry. On the other hand, the extra funding, if it is approved, will likely bring in more customers with clunkers and help the industry at least come close to ten million sales in 2009.

Top Twenty in Year-To-Date Sales

1. Ford F-Series – 215,959
2. Toyota Camry – 184,216
3. Chevrolet Silverado – 177,566
4. Honda Accord – 160,817
5. Corolla/Matrix – 151,236
6. Honda Civic – 148,496
7. Nissan Altima – 115,680
8. Dodge Ram Pickup – 112,239
9. Ford Fusion -102,756
10. Honda CR-V – 98,068
11. Ford Escape – 96,643
12. Chevrolet Impala – 93,336
13. Ford Focus – 91,184
14. Chevrolet Malibu – 91,168
15. Toyota RAV4 – 78,153
16. Toyota Prius – 74,924
17. Toyota Tacoma – 65,713
18. Honda Odyssey – 63,339
19. GMC Sierra – 60,532
20. Ford E-Series Van – 54,680